Chevron to dump RPL?

Chevron Corporation, one of the world’s largest global energy companies, may pull out of Reliance Petroleum (RPL) by selling its 5 per cent equity to Reliance Industries.

This follows Reliance Industries’ divestment of 4 per cent stake last week in RPL for over Rs 4,023 crore. Reliance Industries’ stake in RPL now stands at 71 per cent.

A Chevron spokesperson told : “We continue to evaluate our options with our ownership in RPL. We will provide specific project updates when definitive decisions are made.”

A Reliance Industries spokesperson said the company would not like to react to market speculation about its future stake in RPL.

Chevron bought 5 per cent in RPL at Rs 60 a share one-and-a-half years ago before RPL’s Rs 2,700-crore public issue.

The US energy giant has the option to raise its stake to 29 per cent either three months after the RPL project is commissioned or three years from the date the agreement was signed, whichever is later. The agreement between the two was signed in April 2006.

RPL is setting up a refinery of 580,000 barrels per day at Jamnagar in Gujarat.

Industry sources said Chevron is not keen to increase its stake in RPL at the current market price, which will cost it nearly Rs 22,000 crore.

Shares in RPL fell 2.6 per cent today to Rs 204.05. The stock hit a life-time high of Rs 295 on November 1 on speculation that Chevron may increase its stake in the company, but the rise in prices was a deterrent for the US firm to raise its stake, analysts said.